Business
Mercari : Consolidated Financial Results for the Six Months Ended December 31, 2021
Mercari : Consolidated Financial Results for the Six Months Ended December 31,
About this update from Mercari, Inc.
English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. Consolidated Financial Results for the Six Months Ended December 31, 2021 [Japanese GAAP] February 3, 2022 Company name: Mercari, Inc. Stock exchange listing: Tokyo Stock Exchange Code number: 4385 URL: https://about.mercari.com/en/ Representative: Shintaro Yamada, Chief Executive Officer Contact: Jun Yokota, SVP Corporate Phone: +81-3-6804-6907 Scheduled date of filing quarterly securities report: February 10, 2022 Scheduled date of commencing dividend payments: - Availability of supplementary briefing material on quarterly financial results: Available Schedule of quarterly financial results briefing session: Scheduled (Amounts of less than one million yen are rounded down.) 1. Consolidated Financial Results for the Six Months Ended December 31, 2021 (the "Period") (July 1, 2021 to December 31, 2021) (1) Consolidated Operating Results (cumulative) (% indicates changes from the previous corresponding period.) Net profit Net sales Operating profit Ordinary profit attributable to owners of parent Six months ended Millions of % Millions of % Millions of % Millions of % yen yen yen yen December 31, 2021 71,191 47.7 (1,774) - (1,797) - (2,728) - December 31, 2020 48,213 46.1 1,370 - 1,190 - 4,111 - (Note) Comprehensive income: Six months ended December 31, 2021: ¥(2,509) million [ -%] Six months ended December 31, 2020: ¥(380) million [ -%] Basic earnings Diluted earnings per share per share Six months ended Yen Yen December 31, 2021 (17.11) - December 31, 2020 26.25 25.26 (Notes) 1. The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the fiscal year (July 1, 2021). All figures for the six months ended December 31, 2021, reflect the application of this accounting standard. 2. Information on diluted earnings per share for the six months ended December 31, 2021, is omitted since, although potential shares did exist, the recorded figure was a basic loss per share. English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. (2) Consolidated Financial Position Total assets Net assets Equity ratio Millions of yen Millions of yen % As of December 31, 2021 327,010 40,571 12.0 As of June 30, 2021 262,529 40,013 14.9 (Reference) Equity: As of December 31, 2021 ¥39,221 million As of June 30, 2021 ¥39,060 million (Note) The Company has applied the "Accounting Standard for Revenue Recognition" (ASBJ Statement No. 29, March 31, 2020) from the beginning of the fiscal year (July 1, 2021). All figures as of December 31, 2021, reflect the application of this accounting standard. 2. Dividends Annual dividends 1st 2nd 3rd Year-end Total quarter-end quarter-end quarter-end Fiscal year ended Yen Yen Yen Yen Yen - 0.00 - 0.00 0.00 June 30, 2021 Fiscal year ending June 30, - 0.00 2022 Fiscal year ending June 30, 2022 - - - (Forecast) (Note) Revisions to the forecasts of cash dividends most recently announced: No 3. Consolidated Financial Results Forecast for the Fiscal Year Ending June 30, 2022 (July 1, 2021 to June 30, 2022) The consolidated financial results forecast for the current fiscal year is not stated because it is difficult to reasonably estimate a forecast of the financial results. Details concerning the reasons thereof are stated in "1. Qualitative Information Regarding Results for the Period (4) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Statements" on page 4 of the Appendix. English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. * Notes: Changes in significant subsidiaries during the Period (changes in specified subsidiaries resulting in changes in scope of consolidation): No Application of special accounting treatments for preparing the quarterly consolidated financial statements: Yes Changes in accounting policies, changes in accounting estimates and retrospective restatement Changes in accounting policies due to revision of accounting standards: Yes Changes in accounting policies other than 1) above: No Changes in accounting estimates: No Retrospective restatement: No Total number of issued shares (common stock) Total number of issued shares at the end of the Period (including treasury stock): December 31, 2021: 159,968,375 shares June 30, 2021: 157,807,344 shares 2) Total number of treasury stock at the end of the Period: December 31, 2021: 2 shares June 30, 2021: 2 shares 3) Average number of shares during the Period: Six months ended December 31, 2021: 159,460,066 shares Six months ended December 31, 2020: 156,596,395 shares Quarterly Consolidated Financial Results are exempt from quarterly review conducted by certified public accountants or audit firms. Explanation of the proper use of financial results forecast and other notes The consolidated financial results forecast for the current fiscal year is not stated because it is difficult to reasonably estimate a forecast of the financial results. Details concerning the reasons thereof are stated in "1. Qualitative Information Regarding Results for the Period (4) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Statements" on page 4 of the Appendix. English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. Table of Contents 1. Qualitative Information Regarding Results for the Period 2 (1) Explanation of Operating Results 2 (2) Explanation of Financial Position 3 (3) Explanation of Cash Flows 4 (4) Explanation of Consolidated Financial Results Forecasts and Other Forward-looking Statements 4 2. Quarterly Consolidated Financial Statements and Primary Notes 5 (1) Quarterly Consolidated Balance Sheets 5 (2) Quarterly Consolidated Statements of Income and Comprehensive Income 7 Quarterly Consolidated Statements of Income 7 Quarterly Consolidated Statements of Comprehensive Income 8 (3) Quarterly Consolidated Statements of Cash Flows 9 (4) Notes to the Quarterly Consolidated Financial Statements 10 Notes on going concern assumption 10 Notes on significant changes in the amount of shareholders' equity 10 Application of special accounting treatments for preparing the quarterly consolidated financial statements 10 Change in accounting policy 10 Segment information, etc. 11 Significant subsequent events 11 1 English Translation This is a translation of the original release in Japanese. In the event of any discrepancy, the original release in Japanese shall prevail. 1. Qualitative Information Regarding Results for the Period (1) Explanation of Operating Results The Company and its group companies (collectively, the "Group") have been working to realize the Group mission to create value in a global marketplace where anyone can buy & sell. The Group continued to work toward this goal, focusing on creating further growth opportunities for the Group by promoting the development of new domains in Japan and overseas, such as Souzoh, Mercoin, and global expansion, while continuing to grow and strengthen its three pillars. Effective January 1, 2022, the Group has transitioned to a new management execution structure to promote the acceleration of business development globally and the creation of synergy between businesses that the Group operates in Japan. Furthermore, through business activities that have a positive impact on the environment and the world, the Group aims to use the planet's limited resources carefully and build a world where anyone can create value. This year, the Group is also tackling climate change mitigation and D&I as particularly important areas of focus. In order to further promote ESG across the entire Group, Mercari announced the establishment of the ESG Committee, which will function as an advisory body for the Senior Executive Committee. By placing Shintaro Yamada, CEO as the chairperson of the ESG Committee, and appointing ESG officers for each company, the Group will be able to simultaneously promote both business and ESG. In the mainstay Mercari Japan business, the Group focused on providing services that users from a broad spectrum of age demographics can use easily and safely by strengthening such things as personalization features and the web version of Mercari . As a result, Mercari Japan's gross merchandise volume (GMV) for the six months ended December 31, 2021, was ¥430.2 billion, an increase of ¥62.6 billion from the corresponding period of the previous fiscal year, and the number of monthly active users (MAU (Note 1) ) increased to 20.45 million. Additionally, as a first step toward entering the non-fungible token (NFT) business, the Group has joined forces with Pacific League Marketing Corporation to begin providing Pacific League Exciting Momentsβ , which allows users to purchase video content. In addition, in order to pursue the continuous growth of Mercari , the Group established Merlogi, Inc. as a subsidiary of Mercari on October 28, 2021, and launched a new logistics-related business through this subsidiary to build sustainable shipping operations, to improve user experience in shipping, and to reduce the environmental impact. In the Souzoh business, the Group launched the full rollout of Mercari Shops on October 7, 2021. Even with limited features on offer, aggressive marketing measures carried out in the six months ended December 31, 2021, contributed to future growth and led to strong performance, such as a steady increase in store openings, product listings, and other KPIs. With respect to the Merpay business and its mobile payment services, the Group has been working to strengthen earnings potential mainly in the credit area, which leverages AI technology and user data from Mercari to provide an appropriate amount of credit based on the users' most up-to-date usage information. As a result, the number of Merpay users has steadily grown to 12.14 million (Note 2) , and the combined user account balance for fixed-amount payment reached ¥35.0 billion. For the Mercari US business, the Group implemented marketing measures to match the high-demand holiday season. The GMV growth rate continued to grow on a monthly basis, as it has since July 2021, and MAU reached 5.30 million users for the month of December. As a result, the GMV of Mercari in the US for the six months ended December 31, 2021, was $580 million (¥64.9 billion; the exchange rate conversion is calculated using the average rate during the Period, ¥111.91 against the US dollar), up $27 million from the corresponding period of the previous fiscal year, and MAU increased to 5.12 million. As a result, for the six months ended December 31, 2021, the Group recorded net sales of ¥71,191 million (47.7% increase year on year), operating loss of ¥1,774 million (compared to operating profit of ¥1,370 million in the corresponding period of the previous fiscal year), ordinary loss of ¥1,797 million (compared to ordinary profit of ¥1,190 million in the corresponding period of the previous fiscal year), and net loss attributable to owners of parent of ¥2,728 million (compared to net profit attributable to owners of parent of ¥4,111 million in the corresponding 2 This is an excerpt of the original content. To continue reading it, access the original document here .